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Financial market participants

Investors

Speculators speculation

Institutional investors Insurance companies Investment banks Hedge funds Mutual funds Pension funds Private equity funds Venture capital funds Banks Credit Unions Trusts Prime Brokers

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An institutional investor is an investor, such as a bank, insurance company, retirement fund, hedge fund, or mutual fund, that is financially sophisticated and makes large investments, often held in very large portfolios of investments. Because of their sophistication, institutional investors may often participate in private placements of securities, in which certain aspects of the securities laws may be inapplicable. For example, in the United States, a private placement under Rule 506 of Regulation D may be made to an "accredited investor" without registering the offering of securities with the Securities and Exchange Commission. In essence institutional investor, an accredited investor is defined in the rule as:

• a bank, insurance company, registered investment company (generally speaking, a mutual fund), business development company, or small business investment company;

• an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;

• a charitable organization, corporation, or partnership with assets exceeding $5 million;

• a director, executive officer, or general partner of the company selling the securities;

• a business in which all the equity owners are accredited investors;

• a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;

• a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

• a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

In various countries differnet types institutional investors may be more important. In oil-exporting countries sovereign wealth funds are very important, while in developed economies pension funds may be more important.

In Canada, both pension funds and government funds are powerful investors in the market with hundeds of billions of dollars in assests in an economy of only around one trillion dollars. The most important being:

• Caisse de dépôt et placement du Québec (C$237.3 billion [2007])
• Canada Pension Plan (C$116.6 Billion [2007])
• Ontario Teachers' Pension Plan (C$106 billion [2006])
• Alberta Investment Management (C$73.3 billion [2007])

• Foreign Institutional Investor, an institution which invests in the financial markets of a country which is different from where it is incorporated

• Private Placement

• Institutional Investment Report - a report commissioned by The Conference Board on insitutional investment trends in US and abroad.

• Euromoney Institutional Investor PLC - an international publisher of books, magazines, journals, and newsletters relating to institutional finance.
• Institutional Investor magazine - a magazine of record for the finance industry
• Institutional fund management

• Institutional Investment Report
• Institutional Investor Magazine
• The Rise of the Institutional Investor